CAIFA Calls for Single Financial Planning Association in Canada

TORONTO, Oct. 9, 2001 – Canada’s largest association of professional
financial advisors is today calling for a single organization to oversee financial
planners and advisors in Canada. The Canadian Association of Insurance and Financial
Advisors (CAIFA) believes that the creation of a single Canadian organization responsible
for the standards of its professional members will best meet the needs of both advisors
and the consumers of financial products and services.

That’s why, in a letter sent last week, CAIFA proposed a
merger of itself with the Canadian Association of Financial Planners (CAFP), a similar
organization of professional advisors — a large portion of whom are also members of
CAIFA. The letter, in the form of a proposal, was sent to CAFP members across the country.
In CAIFA’s view, such a merger would strengthen the collective voice of professional
advisors at the regulatory and legislative level and reduce consumer confusion.

In the letter, Jim Rogers, CAIFA Chair and a member of both CAIFA and CAFP, says that he is
sure that most CAFP members would like to see the merger of the two associations.

“In our recently conducted focus groups with CAFP
members, most wanted a single organization,” says Rogers. “Our findings say that
members look to their association for ethics and practice standards, continuing education,
networking, greater public recognition and effective advocacy — in addition to member
practice management programs and benefits. CAIFA is committed to all of these and so, we
believe, is the CAFP. So why not combine our efforts to better serve our collective membership?”

In its two-part proposal, CAIFA has asked CAFP members to consider:

A serious, detailed examination of a possible brand-new
professional membership organization, likely with a new name, incorporating both CAFP and CAIFA;

an acknowledgment of the role of the Financial Planners Standards Council (FPSC) and
the universal and growing appeal of the CFP designation, which it administers;

CAIFA would be committed to formulating a path wherein the
standard-setting role of each of the three separate bodies today (CAFP, CAIFA, FPSC) would
be harmonized. The proposal acknowledges that a process would need to be established to
reconcile differing standards and to ensure the highest of the three that might exist
today among the three bodies would be the one to be adopted. CAIFA believes that further
advancement of both performance and application standards are required.

CAIFA is asking CAFP members for support in its bid for a
single organization and is asking CAFP members to submit comments to a special e-mail
address at cafpquestions@caifa.com. The
responses will be aggregated and shared on a “no-names” basis with CAFP’s
executive committee in order to set in motion a formal process of establishing a single
organization for the benefit of both our respective members and the consumers of financial
products and services.

The concept of a merger isn’t a new one. CAIFA and CAFP
leaders entered into merger talks at the beginning of 2000, but weren’t able to come to a
resolution. Rogers is hoping that putting this matter directly to CAFP members will more
likely result in a common path being chosen by both organizations.

CAIFA also believes that the process of financial planning is uniquely different from the
process of marketing financial products and should be regulated differently.

In a letter sent September 21, 2001 to the Joint Forum of
Financial Market Regulators, CAIFA stated that regulating financial planning is not part
of the job description of the regulators for securities and insurance products. If the
people who regulate product sales jump in to regulate financial planning, they “would
only distort and frustrate the development of proper regulation for that emerging
discipline,” the letter says.

“It’s simply not appropriate for the regulators of
financial products to oversee the regulation of financial planning,” says Rogers.
“So the question becomes ‘Who should?’ In our view, a single organization responsible
for standard setting is the solution, and that’s another reason we favour CAIFA and CAFP
formally getting together.”

CAIFA’s position on the regulation of financial planning
has long been part of its advocacy efforts on behalf of its membership. CAIFA members,
located in 51 chapters across Canada comprise the largest group of financial advisors in
the country. But Rogers believes that size isn’t as important as the ability to be
effectively heard by regulators and to effectively serve a professional membership.
“When you have different voices competing with each other, even when they’re saying
essentially the same thing, it gets confusing. Regulators, and most importantly, consumers
can become frustrated trying to sort through the messages sent by Canada’s two
professional planning associations.”

The Canadian Association of Insurance and Financial
Advisors (CAIFA) is a voluntary, not-for-profit professional association whose members are
represented in most major cities and towns across the country. CAIFA is a founding member
of the Financial Planners Standards Council (FPSC), the body that grants the CFP
designation. CAIFA members provide financial advice, and market and sell financial
products to over nine million Canadians.